The price of pot is tumbling in Colorado

In October, the cost of a wholesale pound of cannabis was around $2,400 to $2,600. That price has almost been cut in half to between $1,400 and $1,600 last month, according to data from Tradiv, an online marijuana-distribution platform.

“In less than a year, we’ve seen wholesale prices drop to nearly half of their previous totals,” John Manlove, director of sales at Tradiv, told Business Insider in an email. “We’ve never seen prices like this.”

The reason prices are dropping so rapidly is because the market’s getting flooded. As growers ramp up production, the huge amount of marijuana hitting the market in Colorado is causing a “steady decline” in wholesale prices regardless of demand, says Manlove.

The story’s similar for Washington, where the price of legal marijuana has dropped precipitously since the first recreational dispensaries opened, according to The Cannabist. Wherever there’s a legal market for marijuana, prices have been dropping.

Manlove says that this has to do with the way cities in Colorado, like Denver, regulate the recreational-marijuana market.

In May, Denver’s municipal government extended a moratorium on granting licenses to new retail dispensaries as well as marijuana-cultivation facilities.

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Dispensaries will make the majority of their money from pot products, like beverages and edibles, in the future.